FORD LOSES F-150 ELECTRIC PICK UPS BATTERY SUPPLIER TO IMPORT BAN OVER IP

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Tough times for Ford’s EV truck program.

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Ford loses F-150 electric pickup’s battery supplier in import ban over IP
Fred Lambert
- Feb. 11th 2021 10:37 am ET

@FredericLambert

FORD SK INNOVATION

Ford-F150-Electric-pickup-snow-e1608666012168.jpg

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Ford’s plans for the F-150 electric pickup and and Volkswagen’s plans for the VW ID.4 are in jeopardy as their battery supplier is facing an import ban over intellectual property issues.

LG versus SK innovation


In 2019, LG Chem, one of the top battery suppliers for electric vehicles, filed federal lawsuits against SK Innovation (SKI), another top battery supplier for electric vehicles, over allegedly stealing trade secrets.
In the suits, LG alleges that SK Innovation “accessed trade secrets” by hiring 77 employees from their lithium-ion battery division of LG Chem, which they claim “developed the world’s first commercial pouch-type Li-ion battery for automobiles.”

They claim that some of those employees stole some trade secrets before leaving for SK Innovation:

These employees include dozens of engineers involved in the research and development, manufacturing and assembly, and quality assurance testing of Li-ion batteries, including the newest and most advanced generation battery technology. The lawsuits allege that a significant number of these workers engaged in the theft of LG Chem’s trade secrets to benefit SK Innovation in the development and manufacturing of pouch-type Li-ion batteries, of which LG Chem is the world’s leading supplier.
LG Chem claims to have evidence of the employees conspiring with SK Innovation.

The company filed similar lawsuits against SKI in Korea, as both companies are based in South Korea, and they won in Supreme Court.
They are asking for injunctive relief to block SKI from importing its battery cells and modules in the US.

LG won and SKI is not the only one to lose

The International Trade Commission has now ruled on the case and banned SKI from importing its batteries in the US.
However, Bloomberg reports that the ITC has given Ford and VW, who were counting on SKI’s batteries for some upcoming electric vehicle programs in the US, a few years before the ban is implemented:

SK Innovation will be able to import components for four years beginning now for domestic battery production for Ford’s EV F-150 launching next year, and for Volkswagen’s American MEB line for two years, to give the automakers time to transition to new domestic suppliers, the International Trade Commission ordered.
Ford warned the commission that it is not easy to change battery supplier, but the automaker seems happy with the four-year delay in the ban:

This ITC decision supports our plans to bring the all-electric Ford F-150 to market in mid-2022. Providing this zero-emissions, purpose-built truck for our customers is an important part of our plan to lead the electric vehicle revolution and is a top priority for the company.
Ford has previously confirmed plans to bring an all-electric version of the F-150 pickup truck to market in 2022.

https://electrek.co/2021/02/11/ford-loses-f-150-electric-pickup-battery-supplier-import-ban-over-ip/
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The headline is incorrect: The case specifically says Ford has four years before this applies to their batteries.



-Crissa
 
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Ford CEO Jim Farley encourages the two battery suppliers to make a voluntary settlement deal.

Ford CEO Jim Farley said that the U.S. ITC ruling in the SK Innovation - LG Chem's LG Energy Solution high profile court clash, that includes a 4-year grace period of use SK Innovation batteries in the upcoming F-150 Electric, is highly appreciated.

However, ultimately the best solution would be a voluntary settlement between the two South Korean battery manufacturers:
"While we’re pleased the ITC ruling makes way for @Ford
to bring to market our groundbreaking electric F-150, a voluntary settlement between these two suppliers is ultimately in the best interest of US manufacturers and workers."
Well, surely it would be best to solve the issues in a way to not harm carmakers, but is this possible?
We guess that LG Chem's LG Energy Solution might set a high financial threshold for SK Innovation. The other option will be a deal with carmakers (Ford and Volkswagen), which would buy the plants on its own or with new battery partners. Another possible option is that President Joe Biden will reverse the ruling (there is a 60-day presidential review period).

We will observe the development of the situation, which may change very dynamically in the coming weeks.

https://insideevs.com/news/487691/ford-sk-innovation-lg-chem-voluntary-settlement/
 
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March 03, 2021 02:11 PM
U.S. will review impact of SK Innovation ruling on Biden green transportation goals
DAVID SHEPARDSON
Reuters


WASHINGTON -- The U.S. Transportation Department will analyze the impact of an electric vehicle battery trade ruling against SK Innovation Co. on President Joe Biden's green transportation goals, the nominee for the department's No. 2 position said.

Deputy Transportation secretary nominee Polly Trottenberg said at a hearing the department would analyze the International Trade Commission's Feb. 10 ruling siding with LG Chem Ltd. that accused SK of misappropriating trade secrets related to EV battery technology.

U.S. Sen. Raphael Warnock, D-Ga., said the ruling "seriously threatens" the viability of SK Innovation's $2.6 billion Georgia plant with 2,600 planned workers, currently under construction.

The senator called the ruling "a severe punch in the gut" for Georgia workers and Biden's push for EVs.

Biden has 60 days to reject or allow the ruling to stand.

SK Innovation told the White House on Feb. 23 Biden's disapproval "is necessary to support the administration's policy on tackling the climate crisis."

The ITC issued a limited 10-year exclusion order prohibiting U.S. imports of some lithium-ion batteries by SK Innovation, but permitted SK to import components for domestic production of lithium-ion batteries and other parts for Ford Motor Co.'s EV F-150 program for four years, and for Volkswagen of America's MEB EV line for the North American region for two years.


Biden has vowed to replace the U.S. government’s fleet of roughly 650,000 vehicles with electric models as the new administration shifts its focus toward clean energy.

SK Innovation said in its presentation to the White House the ruling would force it to shut its Georgia plant, resulting in the loss of nearly 50 percent of the "country's non-captive EV production capacity."

SK plans to invest $5 billion by 2025 in the plant and have 6,000 workers. SK said the carve-out periods "do not provide a solution."

Ford CEO Jim Farley has called on SK and LG Chem to settle the matter.

LG Chem did not immediately comment.

https://www.autonews.com/suppliers/...ation-ruling-biden-green-transportation-goals

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No penalty for stealing intellectual property?
 
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Should that penalty lie on their customers and our economy, or the executives who created the violations?

-Crissa
I’m fine with tossing them in jail — they won’t be. Volkswagen has not had any executives in the US go to prison. They hurt our environment, our economy, our trust. They lied to us for years and laughed and laughed. Then when caught they looked at their feet and said, “I’m sorry” with their fingers crossed behind their backs. Those banks that were too big to fail? How many of their executives saw the gray bar hotel? None! We bailed them out and then they continue to play dirty games. Looking right at you, Wells Fargo. Did we do anything to make them less big so they could fail and not ruin the economy? Nope.

Unless you penalize wrong you won’t get right. Any good parent knows sometimes you have to punish a child in ways that makes life hard on themselves. Not equating a country and companies with paternalism. It is simply an analogy. Sometimes you have to take a little hurt and make a company bleed a few billion dollars to teach them a valuable lesson: Don’t do it. It may be hard, but in the long run you are farther ahead.
 
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To put them in jail, we need laws that do that.

We don't, right now, have laws like that.

-Crissa

Our bought and paid for representatives on both parties won't do anything to change it until we hold them accountable. Calling them every day, letters, emails, etc.
 
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Same shit, different day. Ford either knew or suspected SK Innovations was corrupt and took the low road yet again.

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LG Chem And SK Innovation Clash: U.S. ITC Criticized Ford
Marke Kane
March 5, 2021
https://insideevs.com/news/492494/lg-chem-sk-innovation-itc-criticized-ford/


Ford was criticized for pursuing battery contracts with SK Innovation "after evidence had emerged." VW wanted at least a 4-year extension.

The U.S. International Trade Commission (ITC) released more details about the LG Chem-SK Innovation misappropriated trade secrets court clash that resulted in a 10-year ban for SK Innovation.

According to Reuters, in a redacted version of its full 96-page opinion, the ITC questioned why Ford "had continued to pursue battery contracts with SK Innovation “after SK’s misconduct in this investigation had come to light.” [in 2019]".

ITC criticized Ford, which at that point had just a single EV model with SK Innovation batteries in the pipeline.
"It said Ford had sought business with SK even after a company employee in November 2019 was deposed in the commission’s investigation and at a time when it only had a contract with SK to supply batteries for the EV F-150.
“There is no explanation in the record why Ford would choose to ignore or excuse SK’s egregious misconduct,” the ITC added. “The fault here belongs with SK, as well as with those, like Ford, who deliberately chose to continue to cultivate prospective business relationships predicated on SK’s trade secret misappropriation.”"
Let's recall that SK Innovation's Ford F-150 Electric program is allowed to continue for 4 years, while Volkswagen's ID.4 (MEB) program gets 2 years.


Ford would like to be allowed to continue to use SK Innovation battery cells also in new, undisclosed EVs, but was rejected:

"The ITC also rejected Ford’s request to extend exemptions to Ford’s unannounced new EVs."
"“Ford’s basis for extending the exemption is to take advantage of economies of scope by using similar SK batteries with misappropriated technologies across several unnamed vehicles,” it said. “The commission finds the evidence concerning the public interest does not support Ford’s request.”"
Interestingly, Volkswagen also sought for "at least a four-year extension," but got only two years.
"The ITC opinion said “VW’s preference for less expensive batteries using misappropriated LG trade secrets — in perpetuity, no less — is not a compelling public interest.”"
The blame
It definitely throws new light on the case. According to the report, SK Innovation not only seriously misappropriated LG trade secrets, but then was destroying the evidence: "ordered at a high level and was carried out by department heads throughout SK":
"The ITC said SK Innovation was at least a decade behind LG Chem citing “the very large volume of stolen trade secret documentation, and the expertise improperly acquired by (SK Innovation) from the former LG Chem employees it hired away.”
The ITC also found the “investigation demonstrates not merely SK’s eagerness to destroy documents, but also SK’s callous disregard to ascertain the scope of the destruction after the commencement” of ITC proceedings."
LG Chem estimates that the tech was worth billions of dollars and they would like to see SK Innovation held accountable: "The release of the ITC’s decision puts to rest any questions of whether SK Innovation did anything wrong — they did, repeatedly, and now they must be held accountable."

So what will happen next? Well, SK Innovation is building two battery factories (21.5 GWh total) at a site in Commerce, Georgia:
  • the first: 9.8 GWh was expected to be ready in 2021 (mass production from 2022)
  • the second: 11.7 GWh scheduled for 2023
SK Innovation might halt the construction if they will be allowed to produce batteries only for four and two years. The company counts on President Joe Biden's administration (which has 60 days to eventually reject the verdict). But what then would hold SK accountable?

LG Chem's LG Energy Solution calls to restart settlement negotiations
According to the South Korean media, LG Energy Solution calls to restart the settlement negotiations as soon as SK Innovation will accept the ITC ruling.
The Elec notes that LG Energy Solution might launch a related lawsuit, which will force SK Innovation to pay damages higher than a settlement:
"LG said if SK was to accept responsibility, it will engage in the negotiations flexibly, in consideration of the potential damages a settlement could cause to SK’s business operations. However, if SK continues to refuse in accepting ITC’s judgment, LG will start the related lawsuit [in Delaware], which could cause SK to pay damages higher than a settlement."
The form of compensation is negotiable according to LG Energy Solution. The sum could be paid in cash, equity or royalties.
As we understand, if SK Innovation tries to evade the ban through President veto, then LG Energy Solution might have no mercy in the following lawsuit.
See also
v-battery-plants-at-the-site-northeast-of-atlanta..jpg
U.S. Will Review The ITC's Ban On SK Innovation

ford-f-150-ev-prototype.jpg
Ford CEO Hopes For SK Innovation-LG Chem Voluntary Settlement

ford calls more us ev battery gigafactories Ford CEO Calls For More U.S. EV Battery Gigafactories

target production volkswagen id4 ford f150 ev What Is The Target Production Volume Of VW ID.4 And Ford F-150 EV?
 

Crissa

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LG's pursuit of compensation kinda shows why other companies continued their ties with SKI - LG is after money more than expanding battery production.

-Crissa
 
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